Pages

Recently, the gold has been trading upwards. The price tested the level of $1,142.14 in a high volume. Using the market profile, I found Friday's point of control at the price of $1,133.15 on the 30M time frame. I found strong resistance at the price of $1,142.00. Watch for buying opportunities if the price breaks resitance. Upward target is set at the price of $1,145.80. Anyway, if the price rejects the resistance, watch for selling opportunities with the first downward target at $1,133.15 and the second one at $1,127.90.

Resistance levels:

R1: 1,138.45

R2: 1,139.20

R3: 1,140.10

Support levels:

S1: 1,136.25

S2: 1,135.50

S3: 1,134.10

Trading recommendations for today: Watch price action near resistance to confirm further direction.

The US dollar index is seen to be carving out its higher wave 3 within 5 waves movement from the lows set on November 9 as depicted here. The index dropped lower to the wave 2 on December 8 and is carving wave 3 at this moment. Furthermore, the index has completed the wave 4 today at 102.50 levels and bounced higher into its potential wave 5 rally. The index is trading at 102.89 levels for now and if the above wave structure holds true, the price is likely to remain above 101.50/60 levels. It looks good to keep long positions around there levels with a risk at 101.50 levels. Immediate short-term support is seen at 102.50 levels, while resistance lies at 103.50.

The EURUSD pair made a meaningful top on December 08, 2016, which can safely be defined as wave (2) of the drop from 1.1300 levels earlier. The pair is working out its wave 5, within wave (3) as depicted here, after terminating the 4th wave at 1.0480 levels today. If this wave structure holds well, we should see EURUSD dropping lower towards 1.0300 and 1.0200 levels going forward. The pair is expected to finally terminate around parity levels. On the flip side, a push above 1.0550 and subsequently 1.0680 levels would take the price to 1.0900 levels before reversing lower. It is therefore good to remain short around these levels against 1.0680. Immediate resistance is seen at 1.0680 levels, while support is at 1.0350 levels.

Trading recommendations:

Remain short now, stop around 1.0680 levels and target is 1.0300 and 1.0250.

Recently, EUR/NZD has been moving upwards. The price tested the level of 1.5017 in a high volume. Using the market profile, I found today's point of control at 1.5000 on the 30M time frame. The price is trading above the 21SMA, which is a sign of strength. Besides, there is volume absorption in the background, which is another sign of strength. My advice is to watch for buying opportunities on dips. There is a resistance level at the price of 1.5017. Watch for a potential breakout of resistance to confirm further upward continuation. I placed Fibonacci expansion to find potential upward targets. I got Fibonacci expansion 61.8% at the price of 1.5115 and Fibonacci expansion 100% at the price of 1.5210.

Silver had dropped to yet another low at $15.85 levels on Thursday before bouncing higher. Please note that the metal is trading around $16.00/05 levels for now and it might be looking to test recent swing lows before turning higher again. The recent rally from $15.85 to $16.27 levels looks corrective and hence the trend might not have changed yet. Furthermore, the metal is trading near the past resistance turned support region indicating a bottom is near. The wave structure indicates that the entire rally from $13.60 to $21.00 levels has been retraced to the Fibonacci 0.618 supports, and a turn is just round the corner. Immediate support is seen at $15.80 levels, while resistance is at $17.25 levels.

Gold seems to have formed a meaningful bottom at $1,122.00 levels last Thursday before pulling back higher again. Please note that the yellow metal is trading at $1,137.00 levels for now after printing intraday highs at $1,142.00 levels. The metal could be preparing to form yet another low or at least test $1,122.00 levels before resuming the trend again. Please note that the Fibonacci 0.786 support of the past rally between $1,046.00 to $1,375.00 levels comes in at $1,116.00 levels. The wave structure reveals that the recent rally from $1,122.00 to $1,142.00 levels looks to be corrective and hence the metal could drop one last time before turning higher. Immediate support is seen at $1,122.00 levels, while resistance is seen at $1,165.00 levels.

Trading recommendations:

Remain flat for now and allow a test of recent lows to initiate long positions.

One of the most anticipated economic events this week is the Bank of Japan (BoJ) interest rate decision, monetary policy statement and press conference. The BoJ will release its data between the end of Monday and the beginning of Tuesday, December 20. Market participants are expecting the central bank to keep the quantitative easing unchanged and negative rates on hold at the level of -0.1%. The weak yen and hawkish US growth expectations in form of interest rate hike in last Friday, have given the BoJ room to hold and even improve its economy assessment. The Japanese yen has lost more than 13% since the results of the US election, but a depreciation of the currency could boost corporate profits as much as 20 percent. In conclusion, high volatility is expected.

Let's now take a look at the USD/JPY technical picture on the daily time frame. Since the US election results bulls are in control over this market as the price is trading above all moving averages.The next resistance is seen at the levels of 121.70 and 123.77 and the support is seen at the level of 116.14.

No more good data from the US housing market for the last quarter. According to the US Department of Commerce, new home construction decreased 18.7%, which is the biggest fall in almost two years, to a seasonally adjusted annual rate of 1.09 million units in November. This number is below the market expectations of 1.23 million for the reported period. Moreover, the October data was revised up to a 1.34 million-unit from 1.32 million, and this was the highest number since July 2007. In the other news from the US housing market, building permits declined 4.7% to an annualized rate of 1.20 million units. This number was again lower than market forecasts of a 1.24 million-unit increase. In conclusion, the housing data are getting very violate these days as Trump's victory in the US presidential election changed the outlook in this sector for the US economy: he promised more spending on various construction projects, including houses, airports, railway stations and so on. Will he keep the promise? We will find out soon.

Let's now take a look at the EUR/USD technical picture on the 4H time frame. The market is currently trading just below the weekly pivot at the level of 1.0481, below the technical resistance at the level of 1.0505 and below the golden trend line resistance. Only a clear, impulsive violation of this zone would change the outlook to more bullish, otherwise bears are in full control over this market. The next support is seen at the level of 1.0363.

The top for the green wave i looks to be in place, so now the market is in the corrective decline labeled as the green wave ii. The corrective cycle might have been made as a simple abc correction with the low at the level of 1.3320, so now the market should reverse and continue the rally. Otherwise, the corrective cycle might get more complex and time-consuming and evolve into a pattern like a double zig-zag.

Support/Resistance:

1.3503 - WR1

1.3414 - Intraday Resistance

1.3322 - Intraday Support

1.3292 - Weekly Pivot

1.3269 - Intraday Support

1.3167 - WS1

Trading recommendations:

Day traders should consider opening buy orders as long as the weekly pivot is not clearly violated. TP should be left open for now.

The top for the wave b (green) seems to be in place, so now it is time for a further decline below the intraday support at the level of 122.56. If the corrective cycle is going to unfold as a simple abc correction, this should be the last wave of the corrective progression to the downside. Otherwise, the corrective cycle might get more complex and time-consuming and evolve into a pattern like a triangle.

Support/Resistance:

124.43 - WR1

124.07 - Intraday Resistance

123.01 - Weekly Pivot

122.56 - Intraday Support

121.93 - WS1

120.52 - WS2

Trading recommendations:

Daytraders should consider opening sell orders only if the intraday support at the level of 122.56 is clearly violated. TP should be set at the level of 121.93.

The GBP/USD pair continues to move upwards from the level of 1.2428. The pair rose from the level of 1.2428 (coincides with the ratio of 50% Fibonacci retracement) to a top around 1.2486. Right now, the first support level is seen at 1.2428 followed by 1.2346, while daily resistance 1 is seen at 1.2509. According to the previous events, the GBP/USD pair is still moving between the levels of 1.2428 and 1.2626; for that we expect a range of 198 pips (1.2626 - 1.2428) in coming days. On the one-hour chart, immediate resistance is seen at 1.2509, which coincides with the ratio of 61.8% Fibonacci retracement. Currently, the price is moving in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. The price is still above the moving average (100). Therefore, if the trend is able to break out through the first resistance level of 1.2509, we should see the pair climbing towards the daily resistance at 1.2626 to test it. It would also be wise to consider where to place stop loss; SL should be set below the second support at 1.2346.

The EUR/USD pair has faced strong resistances at the levels of 1.0560 because support became resistance last week. So, the strong resistance has been already formed at the level of 1.0560 and the pair is likely to try to approach it in order to test it again. However, if the pair fails to pass through the level of 1.0560, the market will indicate a bearish opportunity below the new strong resistance level of 1.0560 (level of 1.0560 coincides with a ratio of 38.2% Fibonacci). Therefore, there is a possibility that the EUR/USD pair will move downwards below the level of 1.0560. In overall, we still prefer the bearish scenario as long as the price is below the level of 1.0560. Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength above the moving average (100). Thus, the market is indicating a bearish opportunity below 1.0560, for that it will be good to sell at 1.0560 with the first target of 1.0426. It will also call for a downtrend so as to continue towards 1.0366 (double bottom). The daily strong resistance is seen at 1.0560. However, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1.0619.

EUR/USD: The pair went seriously downwards last week, testing the support line at 1.0400 briefly before engaging in a shallow bullish correction. The outlook on the market remains bearish for the week, as EUR is supposed to continue being weak. The targets for this week are located at the support lines of 1.0400, 1.0350 and 1.0300.

USD/CHF: The USD/CHF went seriously upwards last week, testing the resistance level at 1.0300 before retracing a little. The outlook on the market remains bullish for the week, as USD is supposed to continue gathering stamina. The targets for this week are located at the resistance levels of 1.0300, 1.0305 and 1.0400.

GBP/USD: The cable was consolidating from Monday to Wednesday, when it plummeted heavily, to test the accumulation territory at 1.2400. That accumulation territory is bound to be tested again and breached to the downside, as the outlook on GBP pairs remains bearish for the rest of this year. Long trades are not recommended right now, because the price is expected to continue going further downwards.

USD/JPY: This is a significant bull market. There are clean Bullish Confirmation Patterns on 4-hour and daily charts. The market can pause, trend upwards, pause again, and resume ascending move heading towards the north. Short trades are not advisable in this market.

EUR/JPY: This currency cross is also a bull market just like the USD/JPY. Since the yen is very weak, it would be logical to conclude that the price will continue to go upwards (though EUR is also weak). The targets for this week are located at the supply zones at 118.50, 119.00 and 119.50. There is a Bullish Confirmation Pattern in the market.

The US dollar index closed last week at new highs and has remained in a bullish trend. As long as the price is above 100.70, a short-term trend remains bullish. A long-term trend remains bullish as long as the price is above 96.

Blue lines - bearish divergence

Red rectangle - support

The price is making higher highs and higher lows. The 101.50-102 range is a short-term support. A pullback towards that area is justified. A break below that level will put the short-term bullish trend in danger. The mark of 99.44 is also a very important price level that, if broken, will strengthen the bearish view.

Green line - trend line support

The weekly trend remains bullish despite the divergence signs in the weekly oscillators that are in overbought levels. Bulls need to be very cautious and raise their stops to protect themselves. Weekly support is at 99.40 and next at 96-96.75. The price is above the weekly cloud. The trend remains bullish targeting 104.

The gold price has bounced off the $1,120 support, but still remains in a bearish trend with no trend reversal confirmation. The trend will change on a break above $1,150-60 for the short term and above $1,260 for the medium and long term.

Red lines - bearish channel

The gold price is trading inside the bearish channel and below the Ichimoku cloud. Cloud resistance is at $1,170. A break above will be a bullish sign for the short-term trend. Support is at $1,120. Gold should start a reversal from current levels, otherwise the longer-term bullish scenario is going to get canceled.

Red lines - downward sloping wedge

The gold price continues to trade inside the downward sloping wedge. Weekly oscillators remain oversold and diverging. The price is below the weekly cloud. Bulls need first to break above the wedge and enter the cloud if a long-term bullish move is about to start.

The strong rally seen after the break above minor resistance at 1.4823 is very encouraging for our preferred count that shows an ending diagonal completed with the test of 1.4654. We are currently looking for minor support near 1.4896 to be able to protect the downside for the next rally higher towards 1.5092 and ideally above closer to 1.5162 before a minor correction should be expected.

Once resistance at 1.5092 is broken, there should be no more doubt that a new long-term impulsive rally is developing.

Trade recommendation:

We are long EUR from 1.4830 and will move our stop higher to 1.4782. If you are not long EUR yet, then buy near 1.4896 and use the same stop at 1.4782.

We still favor an expanded flat correction as wave (iv) and look for a decline towards 119.70 before wave (iv) is complete and the final rally higher in wave (v) of 3 will be expected for a rally towards 126.54.

Short-term minor resistance at 122.83 max. 123.34 will cap the upside for the break below 122.03 that will confirm more downside towards 120.10 and likely closer to 119.70 before the correction in wave (iv) is complete.

Trading recommendation:

We are short EUR from 123.50 and will move our stop lower to 123.40. Take profit will remain at 120.25.

USD/JPY is expected to trade with bearish outlook. From a technical view, the pair remains under pressure below its nearest resistance at 118.00, and is likely to post further decline. Both the 20-period and 50-period moving averages are turning down, and act as resistance. In addition, the relative strength index remains capped by a negative trend line. In which case, as long as 118.00 is not surpassed, look for a return to 115.65 and 116.15 in extension.

Trading Recommendation: The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 116.65. A break below this target will move the pair further downwards to 116.15. The pivot point stands at 118. In case the price moves in the opposite direction and bounces back from the support level, it will go above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 118.35 and the second one at 118.65.

USD/CHF is under pressure. The pair has struck against its nearest resistance at 1.0315, and is now reversing down. The declining 50-period moving average now plays a resistance role, and is likely to push the prices lower. Besides, the relative strength index is bearish below its neutrality area at 50.

On the economic data front, housing starts decreased to 1.09M in November (estimated 1.23M) from 1.34M in the previous month. In other news, building permits dropped to 1.2M in November (forecast 1.24M) compared with 1.26M in October.

In which case, as long as 1.0285 is not surpassed, look for a new drop to 1.0210 and 1.0180 in extension.

NZD/USD is under pressure as it is capped by a negative trend line. The pair is heading downward now, and remains capped by its descending trend line. The relative strength index is mixed to bearish below its neutrality area at 50. Besides, the nearest resistance at 0.7000 maintains the strong selling pressure. Therefore, as long as 0.7000 is not surpassed, look for a return to 0.6935 and 0.6920 in extension.

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 0.6935. A break below this target will move the pair further downwards to 0.6920. The pivot point stands at 0.7000. In case the price moves in the opposite direction and bounces back from the support level, it will go above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 0.7045 and the second one at 0.7080.

GBP/JPY is under pressure. The pair is consolidating below its 20-period and 50-period moving averages, while the 20-period moving average just crossed below the 50-period one. The relative strength index is capped by a bearish trend line and is below its neutrality level at 50. As long as 147.30 holds on the upside, look for a further drop toward 145.90 and even 145.50 in extension.

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 145.90. A break below this target will move the pair further downwards to 145.50. The pivot point stands at 147.30. In case the price moves in the opposite direction and bounces back from the support level, it will go above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 147.65 and the second one at 148.15.

When the European market opens, some economic data will be released such as German Buba Monthly Report and German Ifo Business Climate. The US will also reveal some news such as flash services PMI. Therefore, amid the reports EUR/USD will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.0506.

Strong Resistance:1.0499.

Original Resistance: 1.0489.

Inner Sell Area: 1.0479.

Target Inner Area: 1.0454.

Inner Buy Area: 1.0429.

Original Support: 1.0419.

Strong Support: 1.0409.

Breakout SELL Level: 1.0402.

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

In Asia, Japan will release the trade balance report while the US will publish flash services PMI. So there is a probability the USD/JPY will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance. 3: 118.13.

Resistance. 2: 117.90.

Resistance. 1: 117.67.

Support. 1: 117.39.

Support. 2: 117.16.

Support. 3: 116.93

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

The price zone between 1.3845 and 1.3550 (historical bottoms set in January 2009) was considered as a significant demand zone to be watched for bullish recovery. However, by the end of June a significant bearish break below 1.3550 was expressed as seen on the depicted charts (fundamental reasons). Bearish persistence below the demand level at 1.3550 enhanced the bearish scenario towards the current price levels around 1.2700 (nearest bearish projection target). Note that the GBP/USD pair had been trapped inside the depicted consolidation range above 1.2700 until a bearish breakout took place on October 6. Daily persistence below 1.2700 confirmed the bearish Flag pattern. That is why, a bearish projection target would be located around 1.2020. Recently, bullish recovery was manifested around 1.2080. That is why, a bullish pullback is being executed towards 1.2700-1.2750.

Risky traders can consider the recent bullish pullback towards the price zone of 1.2700-1.2750 as a valid SELL entry. S/L should be set at daily closure above 1.2750. T/P levels should be located at 1.2300 and 1.2100.This SELL entry should be carried out cautiously as the ascending bottoms around the price levels of 1.2120 and 1.2320 will probably apply significant bullish pressure over the supply zone of 1.2700-1.2750 thus threatening the suggested trade.

In January 2015, the EUR/USD pair moved below the major demand levels near 1.2100 where historical bottoms were previously set in July 2012 and June 2010. Hence, a long-term bearish target was projected towards 0.9450.

In March 2015, EUR/USD bears challenged the monthly demand level around 1.0570, which had been previously reached in August 1997. Later in April 2015, a strong bullish recovery was observed around the mentioned demand level. However, next monthly candlesticks (September, October, and November) reflected a strong bearish rejection around the area of 1.1400-1.1500. Again in February 2016, the depicted price levels around 1.1400-1.1500 acted as a significant supply zone during the bullish pullback. That is why, recent bearish rejection was expected around the depicted supply levels (note the monthly candlesticks of May, August, and October 2016). In the longer term, the level of 0.9450 remains a projected target if the current monthly candlestick maintains its bearish closure below the depicted monthly demand level of 1.0570.

The long-term outlook for the EUR/USD pair remains bearish as the monthly chart illustrates. Bearish persistence below 1.0825 is needed to enhance this bearish scenario. In September 2016, temporary bullish breakout above 1.1250 was expressed again, but evident bearish pressure was applied on the EUR/USD pair on September 16. Closure below 1.1250 (supply level 1) maintained enough bearish pressure and enhanced the downside momentum towards the price level of 1.1000 (key level 1). On November 9, an obvious bearish break of the 1.1000 price level occurred (Shooting Star daily candlestick). Moreover, further decline below 1.0825 (Fibonacci Expansion 100%) was expressed. Bearish persistence below 1.0825 allowed a further fall to occur at 1.0570 (demand level) where bullish rejection and a valid BUY entry were expressed on November 24. The price level of 1.0825 (Fibonacci Expansion 100%) constituted a recent supply level which offered a valid SELL entry on December 8. Stop Loss should be lowered to 1.0600 to secure some profits. On the other hand, bearish persistence below the depicted demand level around 1.0570 allows further bearish decline. The first bearish target would be located around 1.0220.

The price level of 1.0570 constitutes a recent supply level to be watched for SELL entries if a bullish pullback occurs above 1.0500.

On May 16, a bullish pullback towards 1.3000 (61.8% Fibonacci level) was expected to offer a valid signal to sell the USD/CAD pair. However, a lack of bearish rejection was manifested during recent consolidations.On May 18, temporary bullish fixation above 1.3000 (61.8% Fibonacci level) opened the way towards the 1.3180 level where significant bearish pressure was originated. Bearish persistence below 1.3000-1.2970 (61.8% Fibonacci level) was needed to enhance bearish momentum in the market. However, on August 18 signs of bullish recovery were manifested around the price level of 1.2830 which led to the current bullish breakout above 1.3000. The USD/CAD pair was trapped between the price levels of 1.3000 (61.8% Fibonacci level) and 1.3360 (50% Fibonacci level) until a bullish breakout took place one month ago. Note that the USD/CAD pair challenged the upper limit of the depicted flag pattern around 1.3360-1.3400 which failed to apply enough bearish pressure on the pair during the first attempt.

Shortly after, bearish engulfing weekly candlestick was expressed by the end of the week indicating strong resistance around 1.3550. Bearish persistence below the price level of 1.3300 (50% Fibonacci Level) was achieved. This allowed a further decline towards 1.3200, 1.3090, and 1.2990 (61.8% Fibonacci Level) where bullish rejection was expressed as anticipated.

On the other hand, the current bullish breakout above 1.3360 (50% Fibonacci level) will probably liberate a quick bullish movement towards 1.3700-1.3750 (the upper limit of the depicted channel).

During August and September, a consolidation range was established from the price level of 0.7250 up to 0.7350. Later on October 20, the lower limit of the consolidation range (0.7250) stood as a temporary resistance which initiated a bearish movement towards 0.7100 (lower limit of the depicted channel). Bullish recovery was expressed around the price level of 0.7100 on October 28. Hence, a double-bottom pattern was seen on the chart. Bullish fixation above 0.7250 and 0.7350 was needed to allow further advance towards the projected target of the reversal pattern around 0.7450. However, significant signs of a bearish reversal were expressed around the upper limit of the price range (0.7350).The bearish breakdown of 0.7250 (lower limit of the depicted range) enhanced the bearish side of the market towards the price level of 0.7100 (recent bottom of October 28) which was broken as well. Bearish persistence below 0.7100 allowed a quick decline towards 0.6960 (BUY zone) where bullish rejection and a valid BUY entry were expected. All T/P levels were successfully achieved.Once again, bearish persistence below the price level of 0.7100 was needed to pursue towards lower target levels around 0.7060 and 0.6990 (upper limit of the depicted BUY zone).

Price action should be watched around the current price levels (0.6990) either for bullish rejection or bearish continuation towards 0.6860.

The index managed to consolidate gains above 102.56 during last Friday and it can be a sign that a profit-taking action before New Year Eve is coming. However, to confirm such scenario, we should expect a break below the support level of 101.40, where it coincides with the 200 SMA on the H1 chart. MACD indicator is favoring that scenario. To the upside, we can find a resistance at the 103.98 level.

H1 chart's resistance levels: 103.98 / 104.69

H1 chart's support levels: 102.56 / 101.40

Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the USD Index breaks with a bullish candlestick; the resistance level is at 103.98, take profit is at 104.69 and stop loss is at 103.26.

The pair gained fresh bullish momentum around 1.2387, which is a key demand zone across the board and we can see that it's heading towards the 200 SMA. However, the resistance level of 1.2527 could help to resume the overall bearish bias. If that happens, then we can see a downside continuation to test fresh levels below the demand area mentioned above. It should be noted that the Bollinger indicator is heading to the upside in the short-term.

H1 chart's resistance levels: 1.2527 / 1.2585

H1 chart's support levels: 1.2456 / 1.2387

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the GBP/USD pair breaks a bearish candlestick; the support level is at 1.2456, take profit is at 1.2387 and stop loss is at 1.2527.